What is a Collateral Business Loan?
A collateral business loan is a secured loan that uses commercial real estate as collateral to reduce the risk to the lender, which in turn helps reduce the cost of the loan. Because the funding is secured, small business owners also typically qualify for more funding than they would with revenue-based financing that isn’t secured by “hard” collateral.
Venture Plus Partners Capital® offers collateral business loans from $50,000 up to $250,000, with no restrictions on how you can use your funds. The terms of your collateral business loan will depend primarily on the value and type of collateral offered, your business’s cash flow, and the business owner’s background, personal credit, and repayment history. At Venture Plus Partners Capital, we never want to put anyone’s primary place of residence at risk, so we only accept developed property that is not the business or property owner’s primary residence as collateral.
Collateral Business Loan Rates
Most types of alternative business funding use something called a factor rate instead of a traditional interest rate. Factor rates are simple decimal figures that show how much “extra” you will owe on the original amount of the loan. Your factor rate is determined based on your risk assessment. Most factor rates fall between 1.1 and 1.5.
Who should apply for a collateral business loan?
Collateral business loans are ideal for:
Businesses who need low cost capital for a short period of time
Businesses seeking a larger or longer-term funding option than a merchant cash advance or other small business loan
Businesses making a large purchase, such as new equipment or more inventory
Businesses planning an expansion, merger, or acquisition
Collateral business loans can benefit medical practices, construction companies, manufacturers, automotive businesses, business services, and more. No matter what industry you operate in, our expert Funding Advisors will work closely with you to select the best funding option to help you achieve your business’s goals without sacrificing cash flow.
How to Get a Merchant Cash Advance
1
Apply
Gather 3 months of bank statements and other records. For faster approval, grant us secure access to your bank account’s transactional data.
2
Choose Funding
A Funding Advisor will reach out to you within 1 hour (during regular business hours) to complete your application & discuss your funding options.
3
Get Funded
Once you and your Funding Advisor determine what funding option works for your business, your funds can be approved and deposited within 24 hours.
4
Set Repayment
Payments will be automatically deducted from your business’s daily or weekly debit and credit card sales. Payment amounts will be based on your sales.
How to use collateral business loans
There are no restrictions on how collateral business loans can be used. Collateral loans are typically best used to:
Fund growth strategies, new equipment, and other costly purchases that have a strong ROI
Finance an expansion, merger, or acquisition
Take advantage of seasonal business opportunities such as purchasing inventory in bulk
Collateral Business Loan Qualification Requirements
Venture Plus Partners Capital’s collateral business loan requirements are lower than traditional lenders and other alternative funders. At Venture Plus Partners Capital, we know that credit scores don’t tell the whole story, so we focus on the overall health of your business and the property. Here are some factors we consider:
Type of collateral—we don’t accept primary residences as collateral
Value of collateral, including a recent property appraisal, county tax bill, and real estate schedule
Business revenue
Cash flow
Vendor payment history
Years in business
Public records
Collateral Business Loans Q&A
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Can I get a merchant cash advance with bad credit?Yes, you may be able to get a merchant cash advance with bad credit if your business has strong cash flow. Alternative lenders like Venture Plus Partners Capital have lower credit score requirements, typically starting around 550. Merchant cash advances, invoice factoring, and other alternative small business funding are ideal options for businesses with low credit scores.
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Can I get a merchant cash advance with no bank statements?Some alternative lenders may approve a merchant cash advance with no bank statements, but you can expect much higher rates. Venture Plus Partners Capital requires three months of bank statements and other financial records. What type of business qualifies for an MCA?
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What type of business qualifies for an MCA?Any business that accepts credit and debit card payments may benefit from a merchant cash advance, regardless of industry. Our team of knowledgeable Funding Advisors will work with you to assess your eligibility.
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How do I qualify for a merchant cash advance?Every business is unique. It’s always best to speak with one of our Funding Advisors to review your circumstances and assess your eligibility. In general, we look for consistent revenue with minimum monthly receipts of $7,500 or more, and 6+ months in business. We know that credit scores don’t tell the whole story, so we also consider the overall growth potential of your business. Are there restrictions for how the funding is used? What is the interest rate on a merchant cash advance?
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Are there restrictions for how the funding is used?We do not restrict how you can use your merchant cash advance funding. We believe small business owners understand best what they need to do to grow their businesses, so while our team may provide some coaching, the final decision is yours. What is the interest rate on a merchant cash advance?
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What is the interest rate on a merchant cash advance?A merchant cash advance does not have an interest rate because it is not technically a loan. An MCA is an advance against future sales. The cost of the advance is called a “factor rate”, and it varies based on each business.